HMRC Enquiry Closure Notices: Compelling HMRC to Close Under s28A TMA 1970

HMRC enquiries under s9A TMA 1970 carry no statutory time limit. An officer can keep an enquiry open for years while a taxpayer suffers the commercial uncertainty, reputational damage and professional costs that any live investigation brings. The s28A TMA 1970 closure notice application is the primary statutory remedy – and it works. This guide explains the procedure, the case law on what constitutes “reasonable grounds” for resisting closure, partial closure notices and the practitioner strategy for forcing HMRC’s hand.

Why This Matters

A self-assessment enquiry under s9A TMA 1970 begins with a notice of enquiry issued within the “enquiry window” (generally 12 months of the return’s filing date for a filed-on-time return). Once opened, however, HMRC faces no automatic cut-off. Officers can continue gathering information, requesting documents and seeking third-party data indefinitely, unless the taxpayer acts. The practical consequences of an unresolved enquiry include uncertainty on business accounts and bank lending, the inability to finalise affairs, reputational concern where the investigation touches business relationships and the ongoing professional cost of adviser time.

The s28A closure notice right was designed specifically to address this. In the right circumstances, a well-prepared closure application can force HMRC to identify what it still needs, commit to a timeline or simply close the enquiry altogether. Practitioners who do not deploy this tool on appropriate cases leave their clients with avoidable ongoing exposure.

The Enquiry Framework

HMRC opens a self-assessment enquiry by giving notice in writing to the taxpayer under s9A(1) TMA 1970. For a return filed on time, the enquiry window closes 12 months after the filing date. For a late return, it is 12 months after the day on which the return was delivered. For partnership returns, s12AC TMA applies the same structure. Under the enquiry, HMRC may require the taxpayer to produce documents and information under Sch 36 FA 2008. While the enquiry is open, HMRC cannot make a formal assessment in its own right, amendments are instead made at closure by way of a closure notice under s28A(1).

The s28A Closure Notice Right

Section 28A TMA 1970 provides the statutory framework for closing an SA enquiry. The key provisions are:

• s28A(1): An enquiry is completed when the officer gives the taxpayer a closure notice stating that the enquiry is complete and that in the officer’s opinion no amendment is required or making amendments to the taxpayer’s return.
• s28A(2): The taxpayer may apply to the First-tier Tribunal for a direction requiring HMRC to give a closure notice within a period specified by the Tribunal.
• s28A(5): The Tribunal must give the direction unless HMRC satisfies it that there are reasonable grounds for not giving the closure notice at that time.

The structure of s28A(5) is crucial: the burden falls entirely on HMRC. The taxpayer does not need to establish that HMRC has no legitimate reason to continue. HMRC must affirmatively satisfy the Tribunal. If HMRC cannot do so, the Tribunal has no discretion, it must give the direction. The same structure applies to partnership enquiry closures under s28B TMA 1970.

What Are “Reasonable Grounds”?

The statute does not define “reasonable grounds,” and the case law has built up a practical picture. The following will generally satisfy the test:

• Outstanding document requests: Where HMRC has issued a formal or informal document request that has not yet been complied with, and the documents are genuinely relevant to the enquiry, that will usually constitute reasonable grounds – at least until the FTT has been persuaded that compliance is not feasible or the documents do not in fact exist.
• Third-party information pending: Where HMRC has obtained a Sch 36 third-party notice and is awaiting a response, that is likely to justify a short deferral, but HMRC should be able to identify what is outstanding and when it expects to receive it.
• Genuinely complex analysis: Where the enquiry involves novel or genuinely complex technical issues still being examined (for example, a transfer pricing enquiry or a complex financial instrument), that can be a reasonable ground, but HMRC must be able to identify the specific complexity and show it is being diligently addressed.
• Parallel criminal investigation: Where HMRC is conducting a parallel criminal investigation under Code of Practice 9, premature civil closure could prejudice the criminal process. This may justify keeping the civil enquiry open, though HMRC must be cautious about seeking civil disclosure in circumstances where a criminal caution should have been administered.

The following will generally not constitute reasonable grounds:

• Mere passage of time without identifying outstanding matters
• HMRC understaffing or administrative delay unrelated to the enquiry itself
• A desire to accumulate information that might lead to further enquiry points without identifying a specific outstanding point
• “Fishing” expeditions: an enquiry cannot be kept open simply because HMRC hopes something will turn up
• Failure to progress the enquiry diligently, the obligation to progress is on HMRC

Key Case Law

Jade Palace Ltd v HMRC [2006] SpC 562

One of the foundational cases on the closure notice application. The Special Commissioner (predecessor to the FTT) considered the basis on which HMRC could resist closure and confirmed that the test is an objective one: whether reasonable grounds exist, not whether HMRC subjectively believes they do. The Commissioner emphasised that HMRC cannot use the enquiry indefinitely as a fishing mechanism without identifying specific, substantiated matters still requiring investigation.

Vainker v HMRC [2015] UKFTT 592 (TC)

The FTT granted a direction compelling closure despite HMRC’s assertions that the enquiry was ongoing. The Tribunal found that HMRC had had sufficient time to complete its enquiries and that the matters identified as outstanding did not justify further delay. The case illustrates that a well-evidenced application, documenting the history of the enquiry, will succeed where HMRC cannot point to concrete outstanding steps it is diligently pursuing.

Charlton v HMRC [2012] UKUT 770 (TCC)

The Upper Tribunal confirmed that the scope of an enquiry is determined by the notice of enquiry and is limited to the matters to which the enquiry relates. An enquiry cannot be indefinitely extended by raising new issues that were not within its original scope: HMRC must issue a new notice of enquiry for a new return year. This limits HMRC’s ability to use an existing enquiry as a vehicle for unrelated fishing.

HMRC v Nield-Diffenbach [2021] UKUT 69 (TCC)

The Upper Tribunal analysed the validity and operation of partial closure notices. It confirmed that a taxpayer can apply under s28ZA TMA 1970 for a direction requiring HMRC to issue a partial closure notice and that the FTT must give the direction if HMRC cannot show reasonable grounds for refusing. The case also clarified that a partial closure notice on one aspect of the return does not affect HMRC’s ability to continue the enquiry in relation to other aspects, making partial closure a valuable tool in complex multi-issue enquiries.

Hoey v HMRC [2022] UKUT 307 (TCC)

Though principally concerning the conduct of employment-related enquiries and the scope of PAYE, Hoey contains useful analysis of the procedural framework within which SA enquiries must be conducted, reinforcing the principle that HMRC must observe statutory procedures and that the FTT is the proper venue for resolving disputes about whether an enquiry is being conducted properly.

Partial Closure Notices

Finance Act 2008 s 97 inserted s 28ZA-28ZB into TMA 1970 to create the partial closure notice regime (effective from 1 September 2009). A partial closure notice closes the enquiry in relation to a specific aspect of the return while leaving other aspects open. Its significance is procedural: it allows a taxpayer to appeal against the partial closure to the FTT and therefore have the merits of that aspect decided by a Tribunal, without waiting for the entire enquiry to conclude.

The mechanism works as follows:

1. HMRC issues a partial closure notice on aspect X, either of its own volition or following a direction.
2. The taxpayer has 30 days to appeal the partial closure notice to the FTT (s 31(1)(b) TMA 1970).
3. The FTT hears the appeal on aspect X and makes a determination.
4. The enquiry continues on the remaining open aspects.

Partial closure is particularly useful where HMRC raises multiple issues, one of which is straightforward and capable of being determined quickly. The taxpayer may have a strong case on that issue; securing a Tribunal decision removes it from the enquiry and reduces the overall scope of the investigation. Even where the taxpayer does not ultimately win on the closed aspect, securing a formal determination eliminates uncertainty on that point.

FTT Application Procedure

A closure notice application is made to the First-tier Tribunal (Tax Chamber) under r.29 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (SI 2009/273). The procedure is as follows:

1. Pre-application correspondence: Write formally to HMRC’s handling officer and the HMRC Solicitor’s Office requesting closure of the enquiry and setting out the grounds. Request a formal response within 14 days. This correspondence is admissible and demonstrates to the FTT that the taxpayer attempted to resolve the matter before litigating.
2. Tribunal notice: Submit Form T283 (or a letter in the required form) to the Tax Chamber, setting out: the taxpayer’s details; the return under enquiry; the date of the enquiry notice; a brief history of the enquiry; and the grounds on which the taxpayer contends there are no reasonable grounds for HMRC to resist closure.
3. HMRC response: HMRC has 42 days to file a response setting out the reasonable grounds it relies on. This response is served on the taxpayer.
4. Hearing or determination on the papers: In straightforward cases, the FTT may determine the application on the papers alone (no oral hearing). In complex cases, a short hearing will be listed. Costs are in principle available (see below).
5. Direction: If the FTT grants the direction, it will specify the period within which HMRC must issue the closure notice (commonly 30 to 90 days). HMRC’s failure to comply within that period can be treated as contempt.

Costs Consequences

Tax Tribunal proceedings generally operate on a no-costs basis under r.10(1)(a) of the 2009 Rules, but r.10(1)(b) provides for costs where a party “has acted unreasonably in bringing, defending or conducting the proceedings.” In closure notice applications where HMRC has failed to identify any coherent grounds for resistance or has changed its position after the application was made, costs against HMRC can and have been awarded. An application for wasted costs is worth making where HMRC’s handling has been unreasonable, it focuses attention on HMRC’s conduct and may influence HMRC’s decision-making on similar cases for the same client.

Practitioner Strategy

Document the History

Prepare a comprehensive chronology of the enquiry from the opening notice: all requests made by HMRC, responses provided, undertakings given and not kept and any periods of HMRC silence. This is the foundation of the application. A detailed chronology that demonstrates HMRC has had ample time and information is highly persuasive.

Write to HMRC First

Always write to HMRC formally before applying. Request that HMRC set out every outstanding point. HMRC’s inability to respond substantively – or a response that identifies only vague or already-addressed matters, significantly strengthens the application and sometimes produces voluntary closure. Where HMRC does identify specific outstanding points, you can decide whether to comply (removing that ground) or challenge whether the request is within the proper scope of the enquiry.

Match the Application to the Grounds

Where HMRC has a legitimate outstanding point, address it in your application, either by providing the information and arguing HMRC has had sufficient time to analyse it or by challenging whether the information is within scope. A closure application that ignores HMRC’s strongest point is easier for HMRC to resist.

Consider Partial Closure Where Full Closure Is Unlikely

If HMRC has a genuinely strong case for keeping one aspect open but not others, applying for partial closure on the completed aspects is more likely to succeed and still delivers significant value to the client.

Consider Discovery Assessment Risk

Securing a closure notice without amendment confirms the return as filed and prevents HMRC from making further amendments to those closed matters. However, even after a closure notice, HMRC may still be able to make a discovery assessment under s29 TMA 1970 if new facts come to light. The interaction between the closure and the discovery window requires careful analysis, see the related guide on discovery assessment staleness.

Worked Example: Three-Year Enquiry Into Consultancy Income

HMRC opened an enquiry into the 2021/22 return of a sole trader consultant in January 2023, within the normal 12-month window. It requested bank statements and contracts. These were provided in April 2023. In September 2023 HMRC requested further explanation of three payments totalling £28,000. A detailed response was submitted in October 2023. HMRC acknowledged receipt but did not respond substantively. By December 2024 (over two years since the enquiry opened and 14 months since the last substantive exchange) HMRC has not issued a closure notice or raised any further points.

• Pre-application letter (December 2024): Formal letter to HMRC requesting closure within 28 days and asking HMRC to identify every outstanding matter it considers relevant. HMRC responds with a vague statement that the enquiry is “still under review.”
• Application to FTT (January 2025): Tribunal Form T283 filed, accompanied by a chronology and exhibits. The application notes that HMRC has had the full documentation for 21 months and has identified no specific outstanding point since October 2023.
• HMRC response: HMRC files a response asserting it has not yet completed its review of the October 2023 submissions. The FTT regards this as insufficient: over 14 months is more than adequate to analyse three payments.
• FTT direction: Direction issued requiring HMRC to issue a closure notice within 60 days. HMRC issues a no-amendment closure notice. The client’s 2021/22 return stands as filed.

Practitioner Checklist

1. Confirm the enquiry is still open , check that HMRC has not issued a closure or amendment notice that has been overlooked.
2. Prepare a comprehensive chronology of all communications since the enquiry notice.
3. Write formally to HMRC requesting closure and inviting HMRC to identify every outstanding matter with specificity.
4. Review HMRC’s response , if HMRC identifies specific outstanding items, decide whether to comply or challenge their scope.
5. File the FTT application (Form T283) if HMRC refuses to close or fails to respond within a reasonable time.
6. Identify whether partial closure is appropriate as an alternative or fallback position.
7. Consider costs , if HMRC’s conduct has been unreasonable, include a costs application in the FTT proceedings.
8. Advise on post-closure risk , explain to the client that closure does not prevent a future discovery assessment in relation to matters not yet brought to HMRC’s attention.

Frequently Asked Questions